Penny Wong (SA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

My question is to the Minister for Finance, Senator Cormann. It has today been revealed that, in the Business Council of Australia's letter to senators, Australia's biggest businesses deleted a commitment to 'increase wages'. How can the minister claim the government's $65 billion handout will increase wages when even the companies advocating for this handout refuse to make such a commitment?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

I fully reject that characterisation. I refer Senator Wong to the statement that was issued by the Business Council to the Senate:

We believe that a reduction in the corporate tax rate, as proposed through the Government's enterprise tax plan, is urgent and vital to keep Australia competitive—

and, of course, further—

If the Senate passes this important legislation we, as some of the nation’s largest employers, commit to invest more in Australia which will lead to employing more Australians and therefore stronger wage growth as the tax cut takes effect.

Now, that is economic orthodoxy: businesses investing more. That is, of course, precisely what we want to achieve by reducing our business tax rate and making it more competitive globally. It will lead to more jobs and higher wages. Don't take my word for it; that is what Bill Shorten used to say day in and day out when he was the Assistant Treasurer. He used to make that point day in and day out, and, of course, it is true. I refer you to Bill Shorten's very concise quote:

Cutting the company income tax rate increases domestic productivity and domestic investment. More capital means higher productivity and economic growth and leads to more jobs and higher wages.

That was from Bill Shorten, as the Assistant Treasurer, in the House of Representatives, 23 August 2011. I could not have put it better myself.

Scott Ryan (President) Share this | Link to this | Hansard source

Order! Senator Cormann, please resume your seat. Senator Wong, on a point of order?

Penny Wong (SA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

Point of order on direct relevance: I asked about what has been revealed today in relation to the Business Council of Australia's changed letter to senators. I also seek leave to table the document which demonstrates the commitments that Australian business was not prepared to make.

Scott Ryan (President) Share this | Link to this | Hansard source

Is leave granted? Leave is granted. On the point of order, Senator Wong, you did also ask 'how can the minister claim'—I believe those were your words. I think the minister is being directly relevant to the answer.

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

As I've said on the record on a number of occasions now, I believe that the commitment that was made by the most senior business leaders and the biggest employers across Australia is very significant. If the Senate passes this business tax cut proposal in full, they'll invest more, which will lead to more jobs and, of course, will lead to stronger wages growth. That is what the Labor Party used to believe. The only reason they don't believe it now is to do with politics, not with policy.

Scott Ryan (President) Share this | Link to this | Hansard source

Senator Wong, a supplementary question.

Penny Wong (SA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

I again refer to the leaked letter, now tabled for the Senate, which reveals Australia's biggest businesses deleted a commitment to 'create more Australian jobs in the cities, suburbs, towns and bush'. How can this minister claim the government's $65 billion handout will create jobs when even the companies advocating for this handout refuse to make the same commitment?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

Senator Wong, of course, knows that a more competitive business tax rate in Australia would lead to additional investment, would lead to more jobs and would lead to higher wages, because that is a point that not only the Leader of the Opposition has made day in and day out over the years; it's actually an observation that she herself has made on a number of occasions, and she knows that I'm telling the truth. None other than the shadow Treasurer, Chris Bowen, made the point on 22 September 2015 that a higher company tax rate in Australia hits workers the hardest—not shareholders, workers—when he was advocating for a reduction in the business tax rate down to 25 per cent. Clearly, the senior business leaders of Australia thought it was very important to put a concise and very clear statement to the Senate. They very clearly spelled out that if this business tax cut is passed in full, it will lead to more investment, which of course will lead to more jobs and will lead to stronger wages growth as the tax cuts come into effect. (Time expired)

Scott Ryan (President) Share this | Link to this | Hansard source

Senator Wong, a final supplementary question.

Penny Wong (SA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

I again refer to the leaked letter, which reveals Australia's biggest businesses also deleted a commitment to 'pay our tax'. How can the government continue to advocate for their $65 billion handout to big business when these same companies won't even commit to paying their tax?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

That is of course a complete misrepresentation of what that extract means. Senator Wong knows that companies in Australia have to pay their tax. Senator Wong knows that this government, not with any help from the Labor Party, has taken very strong action to ensure that all businesses in Australia pay their fair share of tax consistent with our laws. Our anti-avoidance provisions are some of the strongest in the world. What this particular extract refers to is some additional transparency measures, as developed by the Board of Taxation, in the form of the transparency code. This is a very specific additional commitment to additional transparency. As Senator Wong knows, that document has no status. It's not a document that was released by the Business Council of Australia. I think Senator Wong might know— (Time expired)